Things to think about Flashcards
What important to you about a house?
Warm Space Light Nice bedrooms and living room Green space Quiet suburban neighbourhood
What financial information will a finance need to see?
Proof of income A budget State of finances Value of Assets Details of debt commitments
How can a house be sold?
Private Sale
Auction
Tender
How does an auction work?
Seller has a reserve in mind, auctioned knows this (kept private). If it’s met then it goes to highest bidder. If not, passed in. If not sold can be negotiated afterwards, highest bidder gets first dibs.
It’s unconditional - need to be sure you can go through with it
What should you do before an auction
• Register your interest with the agent
• Talk things over with your lawyer, and ask them to do all their checks, such as property title
• Get a copy of the auction contract
• Arrange your finance
• Get a valuation
• Any other information or report that you need done
• Decide on your top price
You will also need to make sure that you have money ready to pay a deposit to the auctioneer on the day if you are successful. This is normally 10% of the sale price.
How does a tender work?
You put forward your best offer.
Seller reviews the offers. Selects the one they like best.
You also may need to submit a deposit. (refunded if unsuccessful).
If successful, sale is then unconditional and you need to meet your obligations.
Questions to ask the seller?
- Why are the owners selling?
- How long has the property been on the market?
- How much interest has there been in the property?
- What is the Rateable Valuation?
- How much are the rates?
- What have other places nearby sold for?
- Are there any major development plans for the area?
- What type of title does the property have?
- Are there any covenants (restrictions) or easements (rights)?
- Are there any protection orders over the trees or buildings?
- Where are the boundaries?
- Have there been any recent alterations, and if so, do they have consents and certificates?
What does a lawyer handle?
The conveyancing (.i.e the exchange of ownership)
Deals with Sale and Purchase Agreement. Contract between buyer and seller
Deals with the seller’s lawyer
Advise on legal issues
Assists establishing the mortgage
Managese posession and settlements process
Send notice to local authority
What is a types of reports are useful to get?
A valuation - idea of market value of the property e. qv report
Building report - idea of what possible issues exist. what’s ok, what’s not.
LIM report - info council has on property. You need copy of the title of for the property
Engineers report - Issues with the surrounding land
What does the sale and purchase agreement outline
- the offer
- date of settlement
- conditions that must be meet before sale
DON’T sign this to your certain
What is an unconditional offer?
Straight out offer to buy the house.
Must be certain you have the money to make it happen.
You must be certain, as your instantly obligated to go through with the sale.
What is a conditional offer?
A binding contract. If all conditions are met legally obliged to go through with sale.
What are common conditions on offers?
- Subject to title search – your lawyer will do this for you. This means that the sale will only go ahead if there are no ownership, access or other claims recorded on the property title.
- Subject to valuation – this means that the sale will go through if the valuation is acceptable to you and your financial institution if one is involved.
- Subject to finance – this means that the sale will go ahead if your financial institution approves your finance.
- Subject to a Land Information Memorandum (LIM) report: Your lawyer can do this as well. This means the sale will only go ahead if the property (including any alterations) complies with all building regulations.
- Subject to a builder’s or engineer’s report: This means the sale will only go ahead if you are satisfied that the house or land it is on are sound.
What is by negotiation?
The vendor may accept your offer straight away or may negotiate on the price or other aspects
of the sale. The real estate agent, if one is involved, will act as the “go-between” until you and the vendor reach a happy medium.
Who’s the employer of a Real Estate agent?
The seller
